Posts Tagged appraisal business

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Appraisals Obsolete Now or Later?

By Ann O'Rourke on December 3, 2021 / appraisal business, Fannie, FHA, liability, zillow / Leave a comment

Tags: appraisal business, Fannie, FHA, liability, zillow

Is Appraisal Obsolete?

By George Dell SRA, MAI, ASA, CRE

Excerpt: Obsolete! Such a harsh word. Can it be?

Is the problem convolution?

Does it mean I will soon be obsolete? Not needed? Not loved? Terrible. What can be done?

Yet all the little signs are pointing that way. “Automated” valuation models have much of the market, and continue to gain. Other valuation methods and appraisal exempted transactions continue to grow. Evaluations, desktops, hybrids, auto-measurements, non-appraiser inspections, broker opinions.

To read more, click here

My comment: Another different perspective from George Dell! Check out “Appraisal startup Aloft closes $20M Series A” above! Not the first, and not the last, appraisal-related company to get millions in funding. Who needs experienced field appraisers when we have AVMs, hybrids, etc.?

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Fannie Requiring Appraisal Floor Plans Coming?

By Ann O'Rourke on November 26, 2021 / appraisal business, george dell, humor, liability, real estate market / Leave a comment

Tags: appraisal business, George Dell, humor, liability

Are Floor Plans in Your Future?

By Dave Towne

Excerpts: In the Selling/Servicer Guides of FNMA and Freddie Mac, both GSE’s identify a ‘sketch’ to be a diagram of the subject as measured by the appraiser which shows exterior walls, and includes the dimensions. That’s it. They don’t even say that room labels are needed, but most appraisers include those.

Including a ‘sketch’ in reports as an exhibit is an additional Assignment Condition, beyond what USPAP requires in Standard 2, per the Assumption and Limiting Conditions on the residential forms. Both GSE’s require a more detailed diagram including interior wall locations when interior design abnormalities are discovered, and reported – which they call a “Floor Plan”.

I’ve talked with representatives from both GSE’s recently. Their line of thinking, at the present time, is a “Floor Plan” should be provided as an exhibit in the appraisal report even though the report signing appraiser was not physically present at the subject property when data was gathered. Their line of thinking is also slanted to having third parties provide the subject property data, believing appraisers are more valuable as ‘analysts instead of as observers and detailers of the property characteristics.

Thus the evolution to the new 1004 (Desktop) and 1004 (Hybrid) report forms, with different Scope of Work and Assumption and Limiting Condition statements in each version. (These forms are in your software forms package now.)

To read more and watch the video, click here

My comments: Read this post, watch Danny Wiley’s remarks in a video, and read many appraiser comments. Quite a while ago, Fannie started requiring detailed floor plans. This did not last very long, but I continued doing rough floor plans manually. I still do them but do not include the floor plans in the appraisal sketch. It keeps me from missing a small room, bathroom, etc. Of course, when there are floor plan functional problems, I put the details in the appraisal sketch. In my area, tandem rooms are common (usually from additions). They cannot be included as bedrooms.

When I used to do relocation appraisals, I always included a full interior floor plan with walls and doors. This was standard practice in my area. Doing an interior floor plan with walls and doors takes a lot of time, both measuring and using my sketch software.

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Appraisal vs Zillow vs AVM which is best(Opens in a new browser tab)

Zillow Quits Buying Homes – Their AVM Did Not Work Well!

By Ann O'Rourke on November 12, 2021 / appraisal business, AVMS, bias, zillow / Leave a comment

Tags: appraisal business, bias, zillow

A ‘Fail’ Stamp vector over a white background.

Zillow Quits Buying Homes – AVM Did Not Work Well!!!

Two appraisers comment – Jonathan Miller and Ryan Lundquist

Goodbye Zillow

By Ryan Lundquist

Some of the topics:

Failure despite massive price increases
Zillow losing isn’t about the market
The school of hard knocks
Public perception
Cannot smell the cats: I gave a quote to Money.com last week, and I was especially excited they used my “Zillow cannot smell if 20 cats live there…” line.

To read more, click here

My comment: I love the “20 cats” comment. I appraised a house with at least that many cats. They were on all the tops of dressers, cabinets, etc., Very Creepy! I still have nightmares about it sometimes. A volunteer owned it for a local animal shelter. She had a large outdoor enclosure. Did not smell, but…

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By Jonathan Miller

Zillow Offers As A Proxy For ‘Big Data’ Shows The Lack Of Qualitative Analysis

Yes, big data usually infers ‘quantitative’ analysis, as in “relying on numbers.” The Zestimate legacy of profound inaccuracy finally reached a devastating conclusion with the collapse of Zillow Offers this week and the loss of hundreds of millions in shareholder…

To read more, click here

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This Just In: The ‘A’ in ‘Zillow’ Stands for ‘Accuracy’

Excerpt: Yet it would seem unlikely that Zillow Offers used something completely separate and conceptually very different from their ‘Zestimate’ because it would be quite expensive and extremely difficult to keep a radical new valuation concept a complete secret. All we know at this point is whatever valuation methodology they used was a complete fail. And to go a step further their Zestimate valuation methodology has long been a complete failure in the accuracy department. But it hasn’t been a complete failure in the consumer credibility department at all.

To read more and see fun videos, click here

Zillow (in) accuracy(Opens in a new browser tab)

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Dr. Seuss House aka The Goose Creek Tower

What is “retirement” for appraisers?(Opens in a new browser

Appraiser Retirement?

By Ann O'Rourke on November 5, 2021 / appraisal business, Appraisal Subcommittee, bias, real estate market / Leave a comment

Tags: appraisal business, Appraisal Subcommittee, bias, real estate market

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Appraiser Retirement?

By An Anonymous Appraiser

Excerpt: …retired 2 months ago, and I am SO GLAD I did. I’ve had enough. I decided on an appraisal career because I found real estate, and especially the valuation of homes to be extremely fascinating and challenging, and although I had heard that the appraisal profession was making changes back 30+ years ago, I “assumed” it was becoming a more upstanding, professional occupation, in the eyes of the lenders, politicians and general public, similar in stature to doctors, lawyers and accountants. In other words, they would would hold the appraiser’s opinion via “trust in the professionals opinion”.

What we got, was 30+ years of complaints from the lenders and politicians who blamed appraisers for all of the lenders and political wrong doings. And the public believed them! Why? Because appraisers NEVER got together as an organization to support other residential appraisers! Oh yes, there was the Appraisal Society and the Appraisal Institute, of which I became a candidate, but when I realized that they catered to commercial appraisers, and recently to their own needs, I decided there was no reason for me to join. Besides when licensing came along, the license was the main criteria for selecting the appraiser.

To read more plus many appraiser comments, click here

My comments: Many appraisers are getting older and retiring now for various reasons.

I am 78 years old and have been appraising for 45 years. I love appraising!! (I have not done any lender res appraisals since 2005.) I have friends near my age who are still appraising and like it. They work for direct lenders mostly and do little AMC work.

What is “retirement” for fee appraisers? One of the great reasons to be a fee appraiser is choosing when, where, what you appraise, and whom you work for. In the past, I worked long hours 7 days a week on properties in a wide geographic area. It has been many years since I worked that hard. Many of us just fade away gradually ;>

I recently spoke with two 55-year-old female appraisers. They had both invested in real estate and were retiring early. I have known appraisers over the years who did this. Why aren’t there more? Risk avoidance, I guess. I invested in a duplex in 1986 ($120,000 purchase price). I am living there now after selling my large home. My tenants pay mortgage, insurance, and taxes. I shoulda bought more when the prices were way down here!

I have written about appraiser retirement in my monthly newsletter many times over the years. Be sure you have “tail” insurance to cover any e&O claims after you retire. Mine is free from my E&O company. My most recent article is from May 2021, “Retirement: To Stay or Not to Stay. That is the question!!” Lots of issues to consider. Tip: don’t start taking Social Security until you are 70. I get $3,235 per month now, before the cost of living coming increases. The maximum is $3,985 per month.

Appraiser retirement plans?

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Sewer vs. Septic for Appraisers – Don’t get into trouble!

By Ann O'Rourke on October 22, 2021 / appraisal business, Fannie, Fannie Forms, Freddie, lender appraisals / Leave a comment

Tags: appraisal business, Fannie forms, liability

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What is Included in Appraisal GLA (sq.ft.)?

By Ann O'Rourke on October 8, 2021 / adjustments, appraisal business, real estate market, square footage / Leave a comment

Tags: adjustments, appraisal business, real estate market, square footage

Stairway to Confusion – What is Included in GLA?

by C. Brett Bowen

Excerpt: There has been considerable discussion over the years about gross living area (GLA) measurement standards. The ANSI Z765 standard gets the lion’s share of the attention, and is the most widely referenced standard in the industry by far. It can also be the most difficult to interpret, particularly when it comes to stairs. Here’s why.

It is primarily important to recognize two very important facts:

1) a standard is nothing more than the definition of a unit of comparison

2) it is the appraiser’s responsibility to be consistent with that definition.

First, what do I mean when I say that a standard is nothing more than the definition of the unit of comparison? The unit of comparison for something is critical to the understanding of that thing.

Second, as an appraiser, consistency with the definition is actually more important than which definition is chosen.

To read more, click here

My comment: Worth reading. I have seldom used ANSI. The standards were developed for new home construction. I have appraised many homes on hillsides, with often only the garage at street level (or just a driveway). Many historic homes, on level streets, have different types of “basements” converted to living area: above grade, partly below grade, etc. If I worked in suburbia, ANSI would work better. I use what the local market tells me.

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How to increase appraisal productivity without spending any money

Appraisal Time Killers To Avoid!

By Ann O'Rourke on October 1, 2021 / appraisal business, state appraiser regulators / 1 Comment

Tags: appraisal business, new appraisers

Time Killers: The Biggest Time Management Challenges for Appraisers

McKissock – Survey

Excerpt: What’s one thing you wish you could STOP doing to save time in your workday?

Answering phone calls (28%)

“Phone calls usually are from another client and slow down the task I am trying to accomplish.”

“Phone calls interrupt train of thought and emails aren’t any better. It’s hard to work when parties are micromanaging your work.”

Providing status emails (23%)

“Some clients are sending multiple emails daily on the same property with status update requests. I know some of these are automated, and they can really be annoying and are clogging my inbox.”

“Often, almost everyone involved in the transaction calls or emails for a status. That includes two agents, the processor and loan officer. That situation is very burdensome.”

To read all the challenges plus appraiser comments, click here

My comments: Worth reading. Good tips. I have always had an office assistant to handle these types of problems, since my third month in business in 1986. I had never had a clerical job and was ready to quit appraising. I hired someone to help me. My current assistant has been with me for 18 years.

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The UAD and Appraisers – Past, Present, and Future(Opens in a new browser tab

6 Appraiser Tips on Increasing Productivity

By Ann O'Rourke on September 24, 2021 / appraisal business, bias, Fannie, Fannie Forms / Leave a comment

Tags: appraisal business, bias, Fannie, Fannie forms

6 Ways to Streamline Your Appraisal Workflow

Excerpt:

#6. Reduce revision requests

A revision will waste 15 minutes minimum. To reduce revision requests, track your clients’ common questions, and include that information in all reports when applicable. If you work for a lot of different lenders or do a lot of appraisals for lending-related purposes, those clients and intended users are probably asking some of the same questions over and over.

For example, if your clients often ask about septic, go ahead and include a comment about the septic system in your initial report. In other words, answer the question before they ask it.

To read more plus get 5 more tips, click here

My comments: Short and well written, worth reading. I have been writing about time management in my Appraisal Today monthly newsletter since June 1992, the first issue. Saving time is a very hot topic now when everyone is very busy. All of my many articles are available free to paid subscribers. They are much longer than this blog post, of course.

How to increase appraisal productivity without spending any money

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Wholesale lender has AMC-free appraisals

By Ann O'Rourke on September 17, 2021 / AMCs, appraisal business, bifurcated appraisals, Fannie, real estate market / Leave a comment

Tags: appraisal business, bias, Fannie, real estate market

UWM launches AMC-free appraisal program to coordinate appraisals in-house

Excerpt: The Pontiac, Michigan-based wholesale lender will instead coordinate appraisals in-house, contracting with appraisers directly, offering appraisers and brokers a way to bypass AMCs altogether, which UWM CEO Mat Ishbia characterizes as “middlemen.”

During a Facebook Live address, Ishbia proclaimed that while AMCs add value to the industry, appraisals have been a stumbling block for the mortgage industry.

“It’s going to be cheaper for consumers and more money for appraisers because there’s no longer going to be a middleman with UWM Appraisal Direct,” Ishbia said.

To read more, click here

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Comments from Rob Chrisman’s daily email mortgage newsletter 9-13-21

Critics wonder if appraisers will sign up for UWM’s program, or any program for that matter, given the amount of business licensed appraisers have already. AMCs take about $125-150, maybe as much as $200. If a company like UWM offers $150 more than AMCs to take their orders, does it come with a price, such as an appraiser saying they won’t do business with other AMCs? Stay tuned!

To read lots more, click here Search for appraisals.

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Comments from AppraisedValue (Housing Wire) email with comments. No link available.

The larger question is whether UWM’s direct-to-appraiser approach will be attractive enough to keep appraisers too busy to work with AMCs and whether other lenders will follow suit. As our story notes: Likely the strongest incentive for appraisers is that UWM will pass along the full appraisal fee paid by the borrower. And, while AMCs have been dogged with allegations of late pay, UWM will pay appraisers the next business day after a successful appraisal completion.

Still, some AMCs, such as Class, have already instituted a process to pay appraisers within 24 hours. And some lenders don’t want the headache of bringing valuation in-house.

My comments: I like what UWM is doing, of course. As we all know, there are much more significant problems with AMCs than money, such as long lists of requirements, including everything from every lender they work for!

The Future of Residential Lender Appraisers

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